The terms defined in Section 4 herein shall not be interpreted to be mutually exclusive. For example, as regards clearing corporations, an insurer may be a “direct participant” with a clearing corporation. In all other instances the insurer must use a “custodian” in order to gain access to a clearing corporation. If the insurer uses a bank as a “custodian”, that bank might be a “direct participant” with a clearing corporation; thus the bank meets two definitions, “custodian” and “direct participant”. Similarly the “custodian” bank might not be a “direct participant” with a clearing institution and therefore, to participate in a clearing corporation, must use the services of an “agent” which “agent” maintains an account with a clearing corporation and thus the “agent” also meets the definition of “direct participant”.

As regards the use of the Federal Reserve book-entry system, an insurer in all cases will utilize a “custodian”. The “custodian” bank might also be a “member bank” and no “agent” should be necessary. If the “custodian” bank is not a “member bank” then the “custodian” bank could use the services of another bank which is a “member bank” to utilize the Federal Reserve book-entry system. Such a “member bank” would also be an “agent” as defined in Section 4 herein.